DTN News

DTN Midday Livestock Comments 06/26 12:07

DTN Midday Livestock Comments          06/26 12:07

   Cattle Markets Rally Higher at Midday  

   Sharp gains develop in cattle futures midday Monday which is leading to 
aggressive triple digit rallies through late day trade. The ability to spark 
market support at this point in the week could bring additional buyer activity 
back to the market through the rest of the week.  

By Rick Kment
DTN Analyst

GENERAL COMMENTS: 

   Sharp gains in cattle futures seen midday have created a welcome surprise to 
the market which started out with a defensive tone. This lack of support 
through the complex continues to focus on the potential for increased market 
activity through the rest of the session with the potential of hitting trading 
limits before closing bell. Corn prices are higher in light trade. July corn 
futures are 1 cent lower. Stock markets are higher in light trade. The Dow 
Jones is 41 points higher while Nasdaq is up 2 points.

   LIVE CATTLE:

   Triple-digit gains continue to hold in live cattle market following the 
morning surge in feeder cattle trade which is helping to pull live cattle 
futures higher at midday. The potential for limit higher trade activity is 
starting to develop following what seemed to be a bearish start and created 
some concerns that increased cattle placements would weaken the overall long 
term outlook of the market for the rest of the summer. August futures currently 
lead the complex higher with gains of $2.60 per cwt as traders try to keep up 
with sharp gains in feeder cattle markets. Cash cattle activity is undeveloped 
with show list distribution and inventory taking the main order of business of 
the day. Bids and asking prices may be delayed until midweek. Beef cut-outs at 
midday are higher, $2.08 higher (select) and up $0.03 per cwt (choice) with 
light movement of 71 total loads reported (38 loads of choice cuts, 10 loads of 
select cuts, 16 load of trimmings, 7 loads of ground beef). 

   Feeder Cattle:

   Aggressive buyer support has taken over at midday across feeder cattle trade 
with August futures holding a $3 per cwt rally. This move counters early 
morning losses that focused on the bearish cattle on feed report and increased 
placement levels seen on the Friday report. But the inability for traders to 
continue to hold the market lower has quickly allowed a flurry of buyer 
activity to move back into the market and active triple digit support to move 
back into the complex. It is uncertain just how much long-term support will 
develop through the complex as traders will continue to focus on feeder cattle 
buyer interest through the day. 

   LEAN HOGS:

   Overall lack of trade volume has been seen though most of the morning with 
firm gains holding across the lean hog complex. July futures continue to be 
only contract to hold triple digit gains. Even though front-month futures have 
backed away from session highs, the ability to focus on bullish fundamental 
support continues to keep commercial traders active in the market as well as 
looking for increased market support through the end of the month. Cash prices 
are lower on the National Direct morning cash hog report. The weighted average 
price fell $0.95 at $84.85 per cwt with the range from $82.00 to $86.00 on 
3,045 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct 
morning cash hog report. The weighted average price fell $2.77 at $83.57 per 
cwt with the range from $82.00 to $86.00 on 35 head reported sold. The National 
Pork Plant Report reported 127 loads selling with prices adding $0.12 per cwt. 
Lean hog index for 6/22 is at $90.17 up $0.87 with a projected two-day index of 
$90.62 up $0.45. 

   Rick Kment can be reached at rick.kment@dtn.com 


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